AUD/USD moves in on the critical resistance zone post RBA, traders await RBA's Lowe

• AUD/USD looks like it could have some staying power around 0.71 the fgure. 
• The bulls are in control despite a dovish stance at the RBA. 

At 0.7114, AUD/USD is 0.68% higher on the day after rallying from a low of 0.7033 to a high of 0.7117 so far which was recently hit as in New York late afternoon trade as the greenback remains on the backfoot. 

The Aussie failed to appease the bulls despite yesterday’s Reserve Bank of Australia's dovish outcome. There was some volatility, but no fresh direction for the pair which continues to correct the daily bearish impulse, as illustrated below. 

The RBA ended QE but sounded patient on rate increases. What was telling in the muted impact on AUD/USD is that rate differentials are a secondary driver for the pair. Trapped shorts will have added to the upside as well in the aftermath of the event while traders await the full suite of forecasts that will follow in the RBA’s Statement on Monetary Policy this Friday. before then in Asia today, we will hear from the RBA's governor, Philip Lowe. 

''The Governor has certainly gone out of his way to dissuade pricing for a hike in 1H2022, which leaves the evolution of the data for the market to assess which meetings are “live,” analysts at Westpac explained.

''Westpac’s August meeting expectation appears well placed in that regard. The forward cash profile will still remain steep, especially given the hawkish Fed backdrop, so while yields at the front end and out to 3yrs will be lower, they will only be marginally so and we remain better sellers into strength, despite the RBA message.''

The US dollar may still prevail 

Positioning could be the key when it is all boiled down. AUD should emerge as an outperformer on the back of US dollar weakness and improved risk sentiment for its higher beta staus to global equity performance. From a positioning standpoint, it is highly stretched on the net short side as well. This can support the Aussie for the time being. However, looking forward, the US dollar is going to be supported by the Fed's stance on tightening for most of 2022. Therefore, the resistance on the daily chart should hold initial tests under the status quo.

AUD/USD technical analysis

The price has penetrated into resistance territory and is testing above the 61.8% Fibonacci ratio of the prior bearish impulse. The move has been strong which gives rise to the prospects of some staying power near to 0.7100 before the bears might reemerge again.